Perry L. Weed: We need to tame the tech giants

By Perry L. Weed

Jan 03, 2018 | 5:00 AM

Perry L. Weed is an attorney and the founder and director of the Economic Club of Annapolis. (Courtesy Photo / HANDOUT)

We are beginning to see the dark side of the giant tech companies – the five major players that dominate our lives and exercise their enormous control through digital platforms and social media. Are we – are our public authorities – ready to rein in their vast power?

In the past, federal reviews of acquisitions by the giant platform companies were routinely approved, despite the fact that these giants were notorious for buying, cloning or crushing all rivals. Federal authorities are now having second thoughts about the rising consolidation and accumulated power of the biggest and most dominant data and social media platforms.

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The big five, the largest tech companies measured by market value, are Facebook, Google, Amazon, Microsoft and Apple. These are also the five biggest of all U.S. companies by market capitalization. They were the best performers in 2017, accounting for more than one-third of all stock market gains.

These giants hold a dominant position in advertising, content creation and distribution. They are in the business of monetizing the data they collect. Users beware: If you’re not paying for it, you are the product.

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It is hard to grasp how these five tech companies have come to transform and dominate the world economy. The vast flows of data provide these companies immense scale and power.

Jonathan Taplin, in a June Wall Street Journal review, notes that “we are rushing ahead into the AI (artificial intelligence) universe with almost no political or policy debate ... Digital technology has become critical to the personal and economic well-being of everyone on the planet.”

Taplin further notes that Facebook, Google and Amazon have “wreaked havoc on much of the creative economy – journalists, musicians, authors, filmmakers.” He predicts that in the decade ahead the tech titans will use their digital dominance to overturn much of the service industry – retail, transportation and medicine.

Apple is the world’s largest hoarder of cash – $250 million. Microsoft and Google are Nos. 2 and 3, respectively.

These companies have the resources not only to buy competitors but to clone or crush them, as well as to expand into unrelated fields — for instance, Google’s venture into driverless cars. Facebook and Apple are moving into the television business and producing a new generation of TV shows for smartphones, tablets and other internet screens.

Under current law, the giant internet companies are all but exempt from liability for what their users and advertisers do or and for what harm their actions and services may cause.

The goal of public oversight and reform is not only to protect the public, citizens and institutions of our democracy but also to preserve innovation and competition.

Many of the giants have used their business models and technology to bypass existing rules. Public policy and antitrust regulations – like those in place to regulate the news media and political campaigns – have failed to keep up with the uncontrolled, fast-growing and astoundingly lucrative digital industries. Even in the face of the 2016 Russian cyber attacks and the dissemination of “fake news,” neither the industry nor the regulators have taken any concrete and convincing steps to prepare for the 2018 elections.

The concern here is that the power of the digital giants and their surveillance systems spans the entire economy. Facebook knows what we share, Google knows what we search for and Amazon knows what we buy. Self-regulation by these companies won’t work. State attorneys general are already moving to contain them. Major voices in business are urging regulation. Some argue that these tech companies are, in effect, public utilities.

Unless the federal government, representing the interests of the American people, confronts the rampant growth and vast power of these tech giants, we cede to them our social, political and economic future. In this warp-speed digital world, the old rules won’t work.